This multibagger small-cap stock aims to become net debt-free; stock hits 52-week high on back of volume growth and profit surge!

This follows a substantial reduction of Rs 350 crore over the past two and a half years.

Last Friday, the financial world witnessed a spectacular display on D-Street, where the bulls continued their triumphant march, igniting fireworks display of market optimism. Investors breathed a collective sigh of relief as Nifty VIX contracts generously eased their anxiety. The market resurgence is not merely a flicker, but a strong flame, fueled by a perfect confluence of factors.

Steady macro-economic data and robust domestic corporate earnings have set the stage for this financial renaissance. Global indicators point to the Federal Reserve's reluctance to hike rates in the foreseeable future, and the modest decline in oil prices has further fanned the flames of optimism. As we delve deeper into the ongoing Q2 results, we discover a remarkable trend of healthy expansion in Indian operating margins, which has led to a resounding bounce in earnings growth.

Speaking of earnings growth, one stock, in particular, stole the spotlight on that fateful Friday – Tilaknagar Industries Limited (TI). This unassuming Small-Cap stock, a leading Indian-Made Foreign Liquor (IMFL) manufacturer, unveiled an astonishing 130 per cent surge in net profit, with a staggering Rs 32 crore in the quarter ending September 2023. This marks a dramatic transformation from a PAT of Rs 13.9 crore during the same quarter just a year ago.

Tilaknagar Industries, the maker of the renowned 'Mansion House' brand, also unveiled a phenomenal 29.1 per cent leap in net revenue, raking in an impressive Rs 354.4 crore in the July-September 2023 quarter, compared to Rs 274.5 crore from the previous year. The company's Earnings Before Interest Tax Depreciation and Amortization (EBITDA) climbed to an eye-popping Rs 47.4 crore in the current quarter, showing a remarkable year-on-year growth of 50.9 per cent, up from Rs 31.4 crore in the corresponding quarter last year. For the half-year ending September 30, 2023, the EBITDA surged by 61.5 per cent to reach Rs 86 crore, up from Rs 53.1 crore a year earlier.

The sales volumes for Tilaknagar Industries witnessed a significant upswing in the quarter ending September 2023, totaling 28.5 lakh cases compared to 24.3 lakh cases during the same period in the previous year.

Tilaknagar Industries' flagship brand, Mansion House, continues to be the vanguard of the company's growth, propelling it to capture a larger market share in the brandy segment across various geographies. Notably, their innovation under the Mansion House brand umbrella, the premium flavored brandy (Flandy), has been met with enthusiastic market response, contributing substantially to overall sales.

Perhaps one of the most impressive aspects is the company's disciplined approach to managing debt. As of September 30, 2023, Tilaknagar Industries' net debt stands at a lean Rs 141 crore, an impressive drop of Rs 128 crore from the corresponding period a year ago. This follows a substantial reduction of Rs 350 crore over the past two and a half years.

In a strategic financial move, the company recently completed the refinancing of its debt with Edelweiss Asset Reconstruction Company. Tilaknagar Industries opted for a fresh term loan of Rs 130 crore from Kotak Bank, replacing the Rs 176 crore debt. This move not only provides them with improved cash flow management but also does so without significantly increasing the interest burden.

The company's future looks even brighter, with plans to achieve near net debt-free status by March 2025. It's no surprise that the stock has delivered an astounding return of 153.02 per cent in the last year, firmly establishing itself as a multibagger stock. On Friday, the stock marked a fresh 52-week high of Rs 248 and it jumped nearly 13.5 per cent. 

Disclaimer: The article is for informational purposes only and not investment advice.